tv Nightly Business Report PBS October 5, 2012 6:30pm-7:00pm PDT
captioning sponsored by wpbt >> this is n.b.r. >> susie: i'm susie gharib. the unemployment rate falls to its lowest point in almost four years, what that one statistic could mean for investors and the presidential election. >> tom: i'm tom hudson. but with millions of americans still out of work, we visit one company looking to solve that problem. we round out our job retraining coverage with goodwill. >> susie: and tonight's market monitor guest thinks the stock market rally has some life left in it. he's chuck carlson of horizon investment services. >> tom: that and more tonight on nbr! >> susie: more americans are going back to work. the unemployment rate now stands
at 7.8 percent. it's the first time in almost 4 years that this key measure of the job market has dropped below 8 percent. american businesses added 114,000 new jobs in september and the readings for july and august were revised higher. so, is the labor picture as good as it seems? erika miller takes a closer look at the data and what it says about the u.s. economy. >> reporter: 3-tenths of a percent does not seem like much. but, when it comes to the nation's unemployment rate, a 3- tenths of a percent drop is actually staggering. the unemployment rate now stands at 7.8 percent. that's the lowest level since january 2009, when president obama took office. even more remarkable is the reason for the drop. >> the unemployment rate decline was not because people dropped out of the labor force. to the contrary. the labor force actually
but the household survey estimate of employment increased even more. >> reporter: the household survey shows total employment rose by 873,000. that's the biggest gain since ronald reagan was president. but there's a catch. two-thirds of those jobs are part-time positions, taken because no full-time work was available. and there's another troubling sign: >> what we have is hiring that is concentrated, most recently, in the government sector. hiring that is concentrated, most recently in education and healthcare. a little bit of positive news coming from construction. but in a lot of the business services and goods-producing industries and manufacturing, things look pretty soft at this moment. >> reporter: in addition, 2,000 temporary jobs were cut, which is often looked at as a barameter of future employment. but, the average work week rose to 34-and a half hours... and employers typically boost the workload of existing staff.. before taking on new workers. with all these cross-currents,
the employment situation may be but the bottom line seems to be that the economy is improving, but not nearly as quickly as most people would like. >> we lost so many jobs during the great recession, that we are slowly clawing our way out of that hole.. but still at a pretty slow pace." >> reporter: the government's next jobs report will come out just 4 days before the presidential election. by then, many voters will have made up their minds. so, the impact of today's data may be more political.. than economic. erika miller, nbr, ny >> reporter: the employment report was front and center on the campaign trail as both president obama and governor romney visited virginia. >> reporter: the jobs report took away one of governor romney's signature stump speech about how long the unemployment rate has been above eight percent. >> the reason its come down this year is because more and more people have just stopped looking for work. >> tom: today's report actually showed people returned to the labor force in september.
it's the first time since last october the unemployment rate fell while more people entered in the workforce. >> but today's news certainly is not an excuse to try to talk down the economy and score a few political points. it's a reminder that this country has come too far to turn back now. >> tom: only one more monthly job report remains before election day. and with such high stakes, former general electric c.e.o. jack welch stirred up controversy with this comment on twitter, accusing president obama's re-election campaign of essentially manipulating the report. - quote - unbelievable jobs numbers...these chicago guys will do anything..-end quote. the bureau of labor statistics is where the data comes from each month. it is a non-partisan government agency. meantime, the government red ink kept piling up in the latest fiscal year. the federal government spent $1.1 trillion dollars more than it brought in according to the congressional budget office. that's the fourth straight year of trillion dollar plus
deficits, but down from a year earlier. as for consumer i.o.u.'s, consumer credit grew at its fastest pace in three months.. expanding more than 8 percent in july.. to 2-point-7 trillion dollars. over on wall street, it was a mixed day. the dow gained 35...the nasdaq lost 13...the s&p is down a fraction. for the week.. the dow gained 1.3 percent. the nasdaq was up 6-tenths of a percent. the s- and-p added 1.4 percent this week. >> susie: joining us now with more anaysis on that jobs report... mark zandi...chief economist at moody's analytics. great to see you, mark. tell us about this 7.8%. does this mark the turning point in the job market? >> well, susie toverstates the case. i don't think the job market improved that much in the month of september. but i do think the job market is improving. it's improving enough to bring down unemployment. we're moving in the right direction but not quite as quickly as the data today would
suggest. >> susie: 114,000 new jobs i mean, it's nice people are getting jobs, but it's flota really robust number, is it? what is it telling us about the labor market? >> right. 114,000 is okay. but it isn't robust. i think, though, as you kind of take a step back, look at job gains over the past six months, over the past year, over the past couple of years, we're getting job growth of about 150,000 per month. that's okay. in a normal economy we'd be pretty happy with that, but in this economy, where we have a high rate of unemployment and we want to get that down, 150 k is not enough. we need something north of 200,000 per month before we start feeling really good about the way things are headed. >> susie: mark, what's your take on the criticism by jack welch that we just reported on, where he's questioning the veracity of these numbers. do you believe today's numbers? >> i believe the numbers. you know, i respect mr. welch
very much, but, you know, that's silly. the b.l.s. is very reputable. it would have to be a conspiracy on the grandest of the scales. i take these numbers at face value. they are what they are. >> susie: so, i mean, these numbers are not open to manipulation at all? there was a lot of talk about that today. >> no. they're not at all. no. in fact you've got so many people working on this from all parts of the bureau of labor statistics, there is no possible way there could be a conspiracy. so, no, it's almost funny to even be talking about it, susie. >> susie: you know, the timing of this report is so critical because we're getting closer and closer to election day. does this give president obama an edge? i mean, how important is this unemployment report for the election? >> well, today's jobs numbers were friendly to the president. i mean, it does show that the economy is definitively improving. we've made a lot of progress. when you add it all up, we've
created 4.5, 5 million jobs since job growth resumed just not quite three years ago. we are clearly moving in the right direction, and i do think voters when they think about who to vote for, they have had to come up with a trend line and think about where we're headed and i think these kind of numbers will, indeed, help the president. >> susie: you know, we're all so fixated on this unemployment number, and yet a number of people, whether they're economists or market strategists have been saying it's misguided to focus on this unemployment rate. what we should be really looking at is the fiscal cliff issue. what do you think are the chances of getting some resolution on the fiscal cliff, get something kind of deal on that? >> well, you know not before the election. i'm skeptical we actually get it done in the lame duck. that may depend on how the election goes. having said, that susie, i do think policymakers, the next president, the next congress-- whoever that may be-- will come together and nail down the
fiscal cliff sufficiently reasonably so our economy can get going again. it's going to be a little hairy early next year because there will be political back and forth and brinksmanship. but i think we will do what we need to do, and the good fundamentals in the economy, the fact that american businesses are very competitive, very profitable, that the american banks are capitalized and howms holds are reducing debt, all of those things shine through. >> susie: i hope you're right about that, mark. thanks so much for coming on the program. mark zandi, at mood. >> tom: still ahead, it's been one year since apple founder and visionary steve jobs died. tonight we look ahead to technology that could be in our future. an update on europe and its ongoing financial crisis. e.u. officials say the region's economy shrunk more than expected in the second quarter. year-to-year the eurozone economy contracted by nearly 1%, that's almost twice as much as what was calculated last month. but the e.u.'s statistics agency says the revision could be due
to the region's economy being stronger than thought a year ago. the revision isn't expected to change policymakers' decisions regarding stimulus and bailout efforts. >> susie: even as more americans find work, there are still 12 million people searching for jobs and many workers are discovering they need new skills to land one. you only have to go as far as your local goodwill for some job training services. just last year, more than 3.5 million people reached out to goodwill industries international for help with job training and placement. sylvia hall continues our look
at job retraining. when you think of goodwill, you may think of a store like this. what you may not know is that the money made here goes back to other programs, including job training and placement initiatives. and just last year, they helped nearly 190,000 people find work. baltimore resident michelle brown wants to be included in this year's number. she's been taking job readiness classes at a local goodwill center as part of a welfare-to- work program. >> we learn how to do our resume, we learn how to act on interviews, we learn how to ask questions to certain employers, we learn how to do cover letters, we learn how to just basically find a job the right way. >> reporter: she's joining millions of people who have sought services from goodwill. since the recession began, goodwill has seen a flood of people seeking job training services. they come from a wide range of backgrounds, from people with disabilities, to those who have been incarcerated, to people who just need a few extra skills to
find work. instructor kevin beasley says in the down economy, his students need more preparation than ever to get through tough recruiting processes. >> in the past, even for myself, i know i remember interviews where it was real basic. why are you the best one for the job? and that was it. ok, you know, you can start on monday. but now, because of the job market, the competition is a lot more intense. >> reporter: each center offers different programs and nationwide, clients have found a huge pool of resources, from financial literacy training to career coaching. demand for the organization's online services have also surged in the down economy. >> five years ago, somebody might come to us for a class, one specific type of skill development class, and maybe a little bit of financial coaching. now, we see people coming to us with a magnitude more of need that needs to be addressed in order for that person to be successful.
>> reporter: vacountess drummond is getting job coaching. she's also taking a computer skills class, while she works as a cashier at a goodwill retail store. she has held administrative jobs before, but she says in this economy she needs new skills to land a new one. >> i'm finding that just being able to answer the phones and things like that, it's just not enough. so word isn't even enough. they want experience in exel and powerpoint. and because i love that type of work, i'm willing to do what it takes to gain those skills and then be willing to utilize them. >> reporter: goodwill is also partnering with community colleges across the country to help participants get the degrees, certificates, and industry-specific training they'll need to land local jobs. sylvia hall, "n.b.r.," washington.
>> susie: an end of an era at avon. andrea jung is stepping down as chairman at the beginning of next year. she was the first woman to run the cosmetics retailer when she was named c.e.o. 13 years ago. johnson and johnson executive sheri mccoy became c.e.o. in the spring, as the company deals with slumping earnings and a foreign bribery investigation. jung was expected to stay on as chairman for another year. no word on the reason for the management change. any appetite for stocks after the drop in the unemployment rate dwindled through out today's session. the daily high for the s&p 500 came about an hour after the opening bell. there wasn't much excitement in the stock market from today's job report. the early buying faded with the index finished down just a half point. trading volume was 605 million
shares on the big board. 1.6 billion on the nasdaq. the tech and telecommunications sectors saw the heaviest selling. each fell 7-tenths of a percent. while it wasn't the biggest percentage loser, apple weighed on the technology sector and the overall market. as the largest publicly traded company, apple accounts for the biggest single slice of indices in which it is included. shares fell 2.1 percent. volume was heavier than usual. this is apple's lowest price since mid-august. after the closing bell tonight, a chinese labor rights organization said three to four thousand workers at an iphone 5 assembly plant went on strike over quality requirements and work hours. home depot shares keep sitting at their highest price since the spring of 2000. today's 2.4 percent rally was the best among dow jones industrial stocks. and this breakout comes on stronger than usual volume. with the home market stabilizing, home depot shares
are second only to bank of america among dow stocks performance this year. h.d. is up 50 percent since january. online social network gaming company zynga is disappointing investors again, announcing a delay in launching a number of new games and lowering its earnings forecast. the stock was hit hard by the warning, falling 11.9 percent. volume exploded to more than 10 times average. this is a new low for the stock. it started trading in december at $10. it's just below two and a half time. zynga has struggled to follow up its early success with games like farmville. it said it will focus on casino- style games. the bulk of zynga's sales come through players accessing its games on facebook. and facebook shares were down 4.7 percent although volume was a little lighter than usual. as for video game retailer game stop, it's shares bounced 3.2 percent. the stock sold off last month but pre-orders for nintendo's
wii 2 video game console have been strong, helping improve the outlook for the video game business during the holidays. a couple of very different drinks stocks were moving in opposite directions. first, coffee roaster green mountain. it's best known for its single serve brewers. and with more competition coming to market, the stock continues struggling. shares fell 6.4 percent, taking them down to their lowest price since early august. later this month, two-thirds of wal-mart stores will stock a competitors machine that makes both hot and cold drinks. constellation brands makes its money not from coffee but from liquor and wine. shares are at an all time high, up 4.3 percent today. the company reported better than expected quarterly profits. business has been helped by its full control of crown imports. that company imports corona into the u.s. three of the five most actively traded exchange traded products were lower. with the s&p 500 ending essentially unchanged, the volatility exchange traded note was down 1.4 percent.
and that's tonight's market focus. >> susie: next week on n.b.r. dyson, the vacuum cleaner company is hanging up its "help wanted sign". we'll visit the company's new chicago-area call center. and the holiday season is fast approaching. next week we're looking at reatil, from e-commerce to brick-and-mortar stores, what retailers are doing to get you to spend more money. >> tom: the dow jones industrial average may be at its highest price since 2007 but another barometer of the market's health has struggled. chuck carlson is back with us, c.e.o. of horizon investment services. chuck, you watched the dow industrials but also the dow
transportation index. why are those two big bedroom teres? >> they're two important barometers because they really are brom ters for important parts of the economy. obviously, you have the dow jones industrial average representing the people who make stuff, and the dow transports, the people who ship stuff. what you want to see from an economic perspective is both of those important sectors in sync. when they're not in sync, that can, you know, pinpoint potential problems in the market, which is why we look at the industrials in transports, and what you want to see are both of those industries moving in the same direction and confirming one another. more recently we haven't seen that. we have seen divergence from the dow jones transports and the industrials which is a bit of a flag for this market ask this market will continue to move higher without the transport's help. >> tom: we have seen since july. the transportation average iniole has hit the brakes. it's a yellow flag. why not a red flag? >> well, for a couple reasons. you're stell seeing pretty good
corporate earning growth. i've been there this business for 30 years and one of the maxims that's true, tom, is don't fight the fat. you have seen massive expansionary policies and i think that's one of the things helping the market up to this point. we're going to get a real good glimpse with the corporate story with the third-quarter corporate profits. >> tom: you are looking to put new money to work in cvs. the stock just off of a 52-week high. what do you expect out of cvs with this environment you're talking about. >> well, we like the stock fair number of reasons. i think it's the right stock for the environment. we're in an environment where i don't think we're going to see tremendous growth because of the economy so companies that can grow their earnings at double-digit levels will be in favor. cvs is one of those companies. they're also giving you revenue growth. you get a little bit of a dividend, raising your dividend. earlier at 30%, and the stock is
still a reasonable value trading at 13 times 2013 estimates. it's a stock that's also a play on obamacare and health care going forward. >> tom: give us 30 seconds on f.i.t.b., another one you're putting money to work for and it has really nicely. >> it has. we're seeing better scores in our models. you get a yield of about 2.5%. the stock is cheap at 10 times earnings. they're buying back over 10% of their shares. there's been insider being in the stock in recent months. i think there's a lot to like. i think the earnings story is improving. and, again, i think there will be ample dividend growth over the next two, three years, paying 40 cents a share and dividends will earn a buck-60 this year so lose prevent of room for putting growth. >> tom: we last saw you on a friday the 13th in the spring. you liked qualcomm and cisco systems. those are both down.
do you own all four you mentioned? >> we do, and we're still recommending all four as well. >> tom: our friday market moncor car with horizon investment services. >> susie: one year ago today, apple co-founder steve jobs passed away. over the past 36 years apple has been at the forefront of innovation. but beyond siri, ruben ramirez takes a look at what's likely to shape technology, not tomorrow or next year, but 20 years from now. >> reporter: brian david johnson has a pretty cool job. he's constantly on the move, criss-crossing the globe as he tries to imagine the future of technology. how do you see the relationships that we have with devices that we use everyday now like our iphones with siri, how do you see that evolving and changing in 20 years? >> your devices have all this computation intelligence and just living with your devices, just living with your smartphone, you'll actually program it. so just living with your smartphone, your smartphone will know you. >> reporter: what do companies need to do to continue to be innovative and think not just
about tomorrow but 20 years from now? >> people want very basic things. people don't change that much and if we can use all of this power to make their lives better then i think we're going to be on the right track. i think if we just think about people as customers, people who can just pay money, i think we're looking at the wrong problem. >> reporter: where do you see the biggest opportunities for the most technological advancement? >> so when i look 20 years out, one of the things i find really, really exciting is the size of meaningful computational power, so the size of the chip, the size of computers keeps getting smaller and smaller and smaller so that by the time that we get to the year 2020, it's almost zero. it's so small that we can turn anything into a computer and so it changes the conversation and what we have to ask is what? what do we want to do with all that power? if we're going to turn our shirt into a computer, that could be awesome, but why? what do we want to do with it? and i think the what is to make people's lives better. >> reporter: brian david johnson
of intel, thanks for joining us. >> thanks ruben, it was a pleasure. technology changes how we do a >> tom: finally tonight, technology changes how we do a lot of things, like how we watch t.v. and communicate. it also may be responsible for something we do a lot less of read, just for the sake of reading. that's what lou's been thinking about this week. here's author and educator lou heckler. >> i am constantly amazed by the number of business people i meet who tell me they don't read. let me clarify: they read internal memos, business publications, online news sites and such, but they don't read for pleasure. the national endowment for the arts has discovered that reading is down in all demographics of americans. even more surprising to me is that for the first time in history, less than half of the u.s. adult american population reads literature. i think we're missing a wonderful opportunity, especially if you call yourself a leader. great leaders i've met are voracious readers. it helps them in many areas, but at least in these three: they gain perspective. they boost their creativity. they enhance their ability to be articulate in broader and
broader areas. some studies have even shown that reading can be a good stress reducer. well, as long as we don't read depressing things. because i travel a great deal and find myself in a huge variety of situations in my work, reading helps me have just enough knowledge about a vast array of topics that i now can relate to people and professions around the globe. a chinese proverb says, a book is like a garden carried in the pocket. grab or download a book this weekend. and happy gardening! i'm lou heckler. >> susie: that's nightly business report for october 5th, have a great weekend everyone, hope you do too tom... >> tom: goodnight susie...we'll and back here tomorrow night. captioning sponsored by wpbt